The role of gold in international monetary relations...

The role of gold in international monetary relations

Gold has long been used as a financial asset, but its apogee, its use has reached in the XIX century. All international payments were made on the basis of gold. During this period, the gold market acquired its main features. He united several specialized financial centers, such as London, Zurich, etc., into a single global network. Regular trading in gold is carried out at financial centers. Transactions in the gold market are conducted for private hoarding, of industrial production, monetary targets and speculation at prices. Gold participants are both intermediaries (dealers and brokers), and actually traders: firms and individuals. More and more deals are made by funds, investment and insurance companies, banks, for speculation on prices. After the Second World War, official state bodies (central banks and finance ministries) practically did not participate in operations in the open gold market, as the IMF rigidly regulated its members in their operations with gold. All participants of the IMF had to adhere to the official price of $ 35 per troy ounce. As a result, all operations of monetary authorities with gold were limited to deals with the US Treasury, which then possessed 2/3 of the world's gold reserves. In 1951, in order to prevent the deviation of the market price of gold from its official price, the IMF allowed its members to sell gold on the market. The increased supply of gold and a calm economic environment helped stabilize the price of gold. Soon, because of the crisis of confidence in the dollar (started in the 1970s), the market price for gold increased sharply. In the years 1971-1974. There was a sharp increase in the market price of gold (from $ 38 to $ 200). After the adoption in 1976 in Kingston (Jamaica) of amendments to the IMF Statute, which excluded gold from international settlements, the price of gold fell to 110Ι12 dollars, and it turned into a common exchange commodity. In the following years, part of the gold reserves of the US WF and the US Treasury were sold out, and gold became a means of private hoarding, an expression of world wealth and a financial reserve for an extreme case.

Currently, the world's gold reserves (with the exception of those already mined) are estimated at 120-200 thousand tons. Their main share (60-80 thousand tons) falls on mines with deep horizons of gold occurrence. The average annual gold production in the world is 2000 tons. The main gold mining countries are: South Africa (reserves 18500 tons), USA (5600 tons), Canada (1500 tons), Russia (3000 tons), Australia (4000 tons). As for the gold reserves in the official international reserves of sovereign states, their total volume by 2013 exceeded 240 thousand tons.

Gold markets, depending on the nature of government regulation, fall into four categories: global with the liberal regime of state regulation (Zurich, London, Frankfurt, Chicago, Hong Kong); national with the liberal regime of state regulation (Milan, Paris); regional with a tight regulatory regime (Tokyo, Athens); black markets (Cairo, Bombay).

In modern international trade in gold, the leading markets are London, Zurich, New York, Chicago. In its current form, the London gold market has existed since the 1920s. Its main participants are traditionally members of the London Gold Bullion Broker Club London Bullion Brokets. London for gold. From 1919 to today it is carried out twice a day, so it is the gold prices of the London market that are considered the most representative. They are used as an information guide for various kinds of settlements and payments, they are laid in long-term contracts, they are used as a basis for market analysis and forecasts. The object of trade on the London gold market is standardized bars (good-delivery-bars). Each ingot is provided with a serial number, a stamp mark and a manufacturer's stamp. Until 1979, the London market was a non-resident market, as within the national regime of currency regulation, British residents were banned from dealing with gold on the territory of the country. In 1979, as part of the new "liberal course" (Thatcherism and Reaganomics) restrictions were lifted, but this decision was belated. World leadership in the gold trade went to Switzerland and the United States.

By the mid-1970's. The largest gold trading center was Zurich. Switzerland became the largest importer of gold bullion: in the 1980s. in the country annually imported from 1200 to 1400 tons of gold, and exported from 100 to 1200 tons. Thus, huge reserves of gold settled in the country. Gold imports in Switzerland reached 70% of all gold produced annually. Since the early 1980's. 11erich was the world market of gold, through which almost half of the world trade in gold passed. Currently, the Swiss gold market annually passes about 40% of the global gold supply. The main market-makers of the Zurich gold market are the largest Swiss banks: UBS Group and Credit Swiss. These banks carry out a wide a circle of the most modern operations with gold, which is their main competitive advantage in comparison with market makers of other world gold markets.

Since the mid-1970s, after the collapse of the Bretton Woods international monetary system and the completion of the process of gold demonetization among world gold markets, along with London and Zurich, American markets, mostly New York and Chicago, have dominated. This was due to the cancellation in 1975 of a 40-year ban on US residents to make transactions with gold (the Golden Prohibition Act, which operated from 1933 to 1976 and banned US citizens from privately owning gold in the form of ingots). Liberalization of trade in gold led to the transformation in the 1980s. New York and Chicago commodity exchanges in the largest trading centers gold futures (fixed-term contracts for 1, 3 and 6 months with execution at a price fixed at the time of the transaction). It should be avenged that in the practice of futures deals with gold it is customary at the conclusion of transactions to make a guarantee deposit (from $ 280 to $ 2,000 depending on the market). The volume of the contract is strictly defined in accordance with the specialization of the market. The most common trades are 100 troy ounces of gold (1 troy ounce = 31.1 g of pure gold, ie 0.9999 gold). Less common deals on 1 and 3 kg.

Until 1974, cash transactions prevailed on the world gold markets, which were executed 48 hours after their conclusion. But after the creation in the 1980s. market urgent gold contracts (futures, forwards, options, swaps), the mechanism of trading in gold has completely changed.

The world's gold market is significantly influenced by its dual status, assigned to gold after its demonetization in 1976. Until 1976, gold was the basis for the "binding" ; exchange rates of reserve currencies, the embodiment of national and world wealth, universal and universal world money, which "gained" currency systems in times of wars and financial and economic crises. After 1976, the situation changed dramatically: gold became an ordinary commodity, however, very expensive. Like other commodities (coffee and cocoa beans, grain, oil, etc.), it is traded on specialized exchanges at exchange prices (in 2012 the average annual exchange price of gold fluctuated around $ 1600 per 1 troy ounce). It should be noted here that the official fixed price of gold within the framework of the Bretton Woods agreements was $ 35 per troy ounce (after two dollar devaluations in 1971 and 1973, they were $ 38 and $ 42.22 per ounce, respectively). Despite the fact that gold in 1976 was declared an ordinary commodity, which had nothing to do with currency, it spontaneously continued to be a real reserve and currency-financial asset. This situation caused a "gold rush" when gold prices began to grow at a rapid pace. On the London Stock Exchange, they reached: in 1980 - $ 850; 1987 - 500; 2000 - 700 and in 2012 - 1600 dollars per troy ounce.

International regulators have been trying to regulate the market price of gold all these years (since the 1960s, when the crisis of the Bretton Woods monetary system was just beginning), influencing it by various methods. The first experience of interstate regulation of the market price of gold was the "golden pool" created in 1961 and existed until 1968. This is an organization created by the United States and seven countries of Western Europe for joint operations in the form of interventions on the London gold market in order to stabilize the market price of gold at a level close to or coinciding with its official price (at that time it was $ 35 per ounce). Within the pool, the Bank of England sold and bought gold monthly at its own expense, at the end of the month the balance of gold operations of the Bank of England was displayed, and it was distributed among member countries of the gold pool in proportion to their quotas. Each country transferred gold from its official reserves to the Bank of England as a pool agent. Containing the growth of the market price of gold compared to the official price (the so-called price scissors) cost the member countries of the pool very high: for example, in 1967, after the devaluation of the pound sterling, 3,000 tons of gold were spent on regulating the market price. After such a hard-to-control flash gold rush In March 1968, the golden pool of eight countries disintegrated. The main results of his activity became the understanding that the interstate regulation of the price of gold can not overcome market pricing factors.

After 1968, instead of a single gold market, the double market emerged and existed until 1976. Gold had two prices - official and market (exchange), and the second exceeded the first in dozens of times. The Jamaican Exchange Conference of 1976 abolished the double gold market, withdrew gold from currency relations (ie, demonetized it), announced gold as an ordinary exchange commodity.

In accordance with the Jamaican agreements, the International Monetary Fund (IMF) began to practice in the 1970s and 1980s. so-called gold auctions, on which gold was sold from the reserves of the fund, which were formed at the expense of the "golden part" quotas of IMF member countries. From June 1976 to May 1980, the fund held 45 auctions and sold 777.6 tons of gold. Developing countries took advantage of the right to purchase gold within their quotas in the IMF on "non-competitive" conditions (at an average price) and purchased 46 tons of metal. The IMF's profit from gold auctions in the form of a difference between the selling price and the official price of gold was partially transferred to the IMF trust fund ($ 4.6 billion out of $ 5.7 billion) to provide concessional loans to developing countries.

In addition to the IMF, gold from its official reserves began to be sold by individual countries (USA, India, Portugal). In 1975, at two auctions, the US Treasury sold 38.9 tons of gold, in 1978-1979. another 491 tons (5% of official reserves). But by the end of the 1990s. gold sales from the international reserves of central banks stopped, and countries began to accumulate gold again in official reserves (currently the leaders in the accumulated gold in international reserves are China, Japan and Russia).

Thus, the demonetization of gold, codified internationally by the Jamaican currency agreement, withdrew gold from international settlements and payments and officially ceased to function as a universal and universal world currency. However, gold over the past 35 years after demonetization has not become a common stock exchange metal, like other precious metals (silver, platinum, iridium, etc.). Gold continues to be considered as extraordinary world money under unforeseen circumstances (wars, economic shocks, natural disasters, etc.). Countries in modern conditions resort to selling part of their official gold reserves for those currencies in which their international obligations under foreign economic contracts and credit agreements are expressed. Therefore, it can be argued that the gold from international currency relations has not completely and completely ceased. It continues to service international foreign economic, foreign exchange, credit and settlement relations indirectly through operations in the gold markets. It can be said that gold in modern conditions retains certain qualities of the currency of currency and is an extraordinary international money.

At the same time, it should be noted that after 1976, when demonetization of gold was fixed de jure, profound changes in the functioning of gold as a currency in international monetary relations and de facto took place. First, credit money - banknotes, bills, checks, plastic cards - ousted gold first from domestic money circulation (this happened in the 1920s, after the First World War), and then from international currency relations. Gold is no longer directly exchanged for goods, gold prices are not set. This means that it ceased to be a world measure of value, a means of payment and settlement. But, remaining extraordinary international money, it remains both the provision of international loans, and the embodiment of world wealth. In addition, the participation of gold in international currency relations is mediated by credit money - national currencies. In world gold markets, these currencies are exchanged for gold through purchase and sale transactions.

Secondly, de jure, gold ceased to be a world-wide means of savings and savings. The surplus of money has long gone into gold accumulation and savings, and their shortage is not replenished from gold reserves. An interesting trend has developed: both central banks of states, the IMF, and private thesauri continue to accumulate gold as an insurance fund. As such, gold continues to be the most reliable and liquid asset of international currency relations. Moreover, the gold reserves of the country show its creditworthiness. A permanent phenomenon was the storage by countries of part of their international gold reserves in international organizations (IMF, Bank for International Settlements, etc.). A situation was created that vividly characterizes the conclusions of many theoretical economists that modern commodity production has not worked out an alternative to gold as a function of savings, savings and the formation of reserves. Foreign exchange and other financial and economic crises are accompanied by "flight" from volatile currencies to gold in the form of "gold rushes". The global financial crisis of 2008-2009. led to another "spike" the price of gold. In 2012, they exceeded $ 1,600 per ounce. Therefore, despite the legal demonetization of gold, it continues to play an important role in international monetary relations.

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